Sunday, August 28, 2011

The plans of the diligent surely lead to advantage, but everyone who is hasty comes surely to poverty. Proverbs 21:5I love this verse when counseling about planning/budgeting, and how it protects us and what happens when we don’t budget.

Planning or budgeting helps to lay a foundation for us to depend on in times of need. A financial emergency happens to everyone. When we don’t have a savings though or plan, that emergency turns into a catastrophe that sometimes can’t be recovered from.

When we don’t have a financial foundation and get into an emergency we don’t think logically. We only think about solving the problem in front of us. That problem is to pay for the emergency at hand. This illogical thinking means that emotions take over (fear), and we tend to make bad decisions. Budgeting will prevent us from acting on emotions and instead use a preplanned attack that won’t hurt us in the long run.

When we make emotional decisions we turn to poor short term instruments to pay for emergencies because we are not thinking rationally. We use things like high interest credit cards, lines of credit, payday loans, title loans, pawn shops, or even worse. Many people use these instruments because they fail to make a plan/budget.

God wants us to depend on Him. That is really hard when we fall into a financial bind. Planning/budgeting helps to prevent financial strife. That does not mean that we can’t fall into financially hard times, because God might want that for us as well (It brings us closer to Him). But, that does not mean we should not plan or budget for our future.

Sunday, August 21, 2011

I will keep this brief. During my financial time of abundance I spent more money, got deeper in debt, did not keep a budget, and ultimately spent more than I made, which made me broke (scarcity of money). When I made a budget and lived on less than I made, I saved more money, paid off more debt, and realized just how creatively I could spend $100 to entertain my family during a month.Successful businesses have realized this as well. Companies like 37 Signals. They offer less features, had less money, and less people. Yet they became a great company, that offered a great product, to some great companies.Ideas work off of scarcity also. When was the last time you created something great when you had a ton of options available? When was the last time you enjoyed a meal that had so many flavors nothing stood out? But, you take some flour, water, yeast, salt, olive oil and a little rosemary and execute it correctly and you can have a loaf of bread that will rival what is made in most local stores and restaurants today.Want to have abundance, then scale something down in your life.

Thursday, August 4, 2011

When Amy and I started on our journey to get out of debt ($120K) it was an overwhelming task. What really helped though was taking it in steps that were doable in the short term yet could show we were making progress.

Track expenses daily. This does not need to be fancy just carry around a small notebook and write down what you spend when you make a purchase. (We started this immediately)

Organize your debt. (We did this in the first week of deciding to do something about our dilemma)

Cut back on spending a little bit at a time. 1% per month and add an extra 1% each of the following months after that. (We were aggressive here, we cut back 10% in our first month, and ended with almost 40% cut back in a year)

Open a new savings account either online or at a separate bank. (We did this in the first day of our journey)

These are just some examples of what we did to kick start paying down our debt. Pick just one and start tonight. After doing one well, check it off your list and start a new milestone. By starting small you will see immediate and beneficial progress that is manageable for the long journey. You might surprise yourself as we did and find out you want to do so much more.